Bayer: Threshold met for $750 million rice deal

By Jeannie Nuss
Associated Press

Published: Thursday, Dec. 15 2011 4:10 p.m. MST

FILE - In this Oct. 1, 2008 file photo, freshly-cut rice drops into the hopper of a combine as it is harvested near England, Ark. A Bayer Crop Science spokesman said Thursday, Dec. 15, 2011, that rice growers have met a threshold to move forward with a proposed $750 million settlement over genetically modified rice. (Danny Johnston, File, Associated Press)

LITTLE ROCK, Ark. — Rice growers met a threshold to move forward with a $750 million settlement over genetically modified rice, the company blamed for the problem said Thursday.

Bayer CropScience had agreed to the settlement this summer, five years after the company inadvertently introduced a strain of genetically altered long-grain rice into the U.S. market. As part of the settlement, Bayer set a threshold of 85 percent of rice acreage involved and could have opted out of the deal if enough farmers didn't sign up.

"Although Bayer CropScience believes it acted responsibly in the handling of its biotech rice, the company considered it important to resolve the litigation so that it can move forward focused on its fundamental mission of providing innovative solutions to modern agriculture," spokesman Greg Coffey said in a statement.

Farmers in Arkansas — where about half of the nation's rice is produced — as well as Louisiana, Mississippi, Missouri and Texas, suffered economic losses after the German conglomerate developed an experimental strain of rice called LibertyLink to withstand its Liberty herbicide. Federal regulators had not yet approved it for human consumption when trace amounts were found mixed with conventional rice seed in storage bins.

No human health problems have been associated with the contamination, but that wasn't known at the time.

The fear that the rice was unsafe, along with the notion that genetically altered rice was somehow impure, quashed sales in major markets. The mistake also left growers with huge losses, since prices fell.

The settlement applies to long-grain rice, which is often used in pilaf or mixed with beans. It doesn't affect farmers who grow medium-grain rice, often used in sushi, or short-grain rice, found in cereal.

The deal will pay farmers for market losses based on acreage and how many years they grew rice. For example, a farmer who planted 500 acres of rice annually from 2006 to 2010 would receive an initial payment of $150,000, at a rate of $300 per acre. Such a farmer could receive more money per acre later on if there's enough money leftover in the pot. Plus, growers can collect more if they switched to crops that typically offer lower profits, such as wheat or soybeans.

Scott Powell, a Birmingham, Ala.-based lawyer who represents some of the farmers involved in the settlement, said most farmers should see payments in the first week of January.

"They've had a tough go of it for the last five years," Powell said Thursday. "It's a great day for them."

Arlon Welch, a 44-year-old farmer in northeast Arkansas, said he'll use the settlement money to pay off the debts he racked up after Bayer's strain of modified rice seeds contaminated the food supply and drove down crop prices.

"We've been dealing with this since 2006," said Welch, who said he doesn't know yet exactly how much he's getting. "We're still hurting."

But the settlement money isn't enough to restore his confidence in rice; Welch planted soybeans and wheat this year.